Blueacorn

• Type: PPP lender service provider. It was never a lender of record.
• Legal entities: Blueacorn PPP, LLC (written "Blue Acorn PPP, LLC" in 2021), an Arizona limited liability company in both sides' court pleadings and the company that answered Congress. Its lawyers named two wholly owned subsidiaries: Fin Cap, Inc., a Wyoming corporation that did business as "Blueacorn.co" and signed the Capital Plus contract, and BA PPP Fin, LLC, which signed the Prestamos contract. A fourth company, BA Fin Orion, LLC d/b/a Blueacorn, a Wyoming LLC, signed Womply's contracts; Womply pleaded that Blueacorn PPP, LLC now owns it. A Delaware company, Blue Oak Forest, LLC, used the same Scottsdale address; its role in the business is not in the record.
• Founded: April 2020, Scottsdale, Arizona, with "the singular purpose" of facilitating PPP loans, in the House Select Subcommittee's words.
• Founders: Nathan Reis, Stephanie Hockridge and Noah Spirakus, by the House report; James Flores, by his own plea papers; Michael Cota, whom the House report calls a co-founder.
• Owners: Under an operating agreement dated May 26, 2021, Spirakus held 50 percent and Reis and Hockridge jointly held 50 percent, as the House report describes it.
• Address: 7014 E. Camelback Road, Suite 1452, Scottsdale, Arizona (court pleadings).
• Chief executives: Reis, co-founder, until spring 2021; Barry Calhoun after that.
• Role: Took PPP applications through its website, reviewed them for two community development lenders, Prestamos CDFI of Phoenix and Capital Plus Financial, LLC of Bedford, Texas, a subsidiary of Crossroads Systems, Inc. (now Crossroads Impact Corp.), and was paid a share of the processing fees the SBA paid those lenders.

In the archive

• Lender page → Blueacorn (aggregator network)
• Interactive: Blueacorn’s $1.09 billion in PPP fees: 61% went to a marketing firm run by members of its leadership
• Interactive: PPP reached the gig workforce a year late: 40,461 rideshare and delivery loans in 2020, 409,313 in 2021
• Interactive: Second PPP draws came a median 23 days after the first at three Womply partner lenders; Blueacorn’s two lenders took 49
• Interactive: The 2021 fee schedule paid lenders $8.74 billion more than the 2020 rules would have
• Interactive: The CDFI channel was a fintech channel: two platforms drove 81% of it
• Interactive: The pandemic-relief machine: 50 actors, seven layers, and $1.16 trillion between Congress and 15 million loans
• Interactive: Two-thirds of PPP dollars were approved before SBA expanded its fraud screening in January 2021 — and the official estimates still span 100×
• Interactive: Who delivered PPP: 11.47 million loans and $792.6 billion, lender by lender
• Profile: Benworth Capital Partners
• Profile: Beth Mueller
• Profile: Biz2Credit
• Profile: BlueVine
• Profile: Celtic Bank
• Profile: Chris Hurn
• Profile: Craig Carpenito
• Profile: Cross River Bank
• Profile: Customers Bank
• Profile: Drew Harwell
• Profile: ERC Mills
• Profile: Everett Sands
• Profile: Fountainhead
• Profile: Gilles Gade
• Profile: Harvest Small Business Finance
• Profile: Inscribe
• Profile: Kabbage / K Servicing
• Profile: Kenneth Polite
• Profile: Kyle Mack
• Profile: Lendio
• Profile: Lendistry
• Profile: LexisNexis Risk Solutions
• Profile: Mindee
• Profile: Numerated
• Profile: Persona
• Profile: Phil Goldfeder
• Profile: Reese Howell Jr.
• Profile: Sam Bobley
• Profile: Square
• Profile: The Loan Source, Inc.
• Profile: Toby Scammell
• Profile: Tony Romm
• Profile: Uber
• Profile: William H. Orrick III
• Profile: William Hockey

Four of the five people the records name as its founders have since been convicted of conspiracy to commit wire fraud. Nathan Reis pleaded guilty and Stephanie Hockridge was convicted at trial; each was sentenced to ten years and ordered to pay more than $63 million in restitution. James Flores pleaded guilty and received 41 months. Michael Cota pleaded guilty and received three years of probation. In April 2026 a federal judge ruled that Nevada trusts into which the couple had moved more than $75 million in 2022 held their assets as nominees. The garnishment order is stayed while they appeal, with exceptions set out in an order that is not public, and no record we have shows any money collected from the trusts. We found no criminal charge against any Blueacorn company.

---

Before the pandemic

Blueacorn did not exist before April 2020. The people who started it did.

The House report described the first leadership team this way: "cell phone accessory merchant and former Lehman Brothers subprime derivative salesman Nathan 'Nate' Reis (Co-Founder and former Chief Executive Officer), his wife and former television newscaster Stephanie Hockridge (Co-Founder and former Customer Service Lead), technology entrepreneur Noah Spirakus (Co-Founder and Chief Technology Officer), and other Arizona-based entrepreneurs" (House report, p. 21). Reis owned Juuice Inc., which the report calls a mobile phone accessory company, and Juuice LLC. Hockridge had been a news anchor at ABC15 in Phoenix from 2011 to 2018, the station reports (ABC15), and owned Body Politix LLC. The indictment says the two were married (superseding indictment, para. 10).

Flores and Cota owned a company called Qualytics (Flores factual resume, p. 2). When Blueacorn's website introduced its team in 2021 under the heading "Meet Our Volunteers," it listed Flores as "Founder, Qualytics," Cota as "Co-Founder, Qualytics" and Vivian Arriaga as "Co-Founder, Qualytics," and said the group had "joined forces and volunteered to build a platform focused on giving underserved businesses free and fair access to PPP funding" (About page). All three were later convicted.

According to the House report, the company that would review hundreds of thousands of applications for Blueacorn, Elev8 Advisors, had been founded in March 2018 by Adam Spencer, "a former payments processing executive," and Kristen Spencer, who "previously worked at a retail branch of a bank and sold insurance" (House report, p. 21).

The name was older than the company. Blue Acorn iCi, a digital-commerce consultancy owned since October 2020 by an Infosys subsidiary, said in a 2021 lawsuit that it and its predecessors had used the "Blue Acorn" name since 2007 and an acorn logo since 2009. It alleged that the new PPP business used an "identical copy of Plaintiff's acorn logo" (verified complaint, E.D.N.C. No. 5:21-cv-251).

---

2020: a website, and the founders' own loans

Blueacorn went live in the spring of 2020 as a free application helper. Its homepage of May 6, 2020 said: "Our service is 100% FREE because The CARES Act mandates banks pay us a fee, if they approve your loan. That means, we don't get paid, if you don't get funded." It named one lender: "Prestamos is non-profit CDFI that has become an ally in supporting our small business community" (homepage, May 6, 2020). The CARES Act required the SBA to pay the lender. Anything the lender paid Blueacorn was paid under a private contract.

Blueacorn later told Congress that its 2020 role was small. Its lawyers wrote in December 2021 that "Blueacorn has only been involved in processing PPP loans since January 2021, and only in any significant volume since the opening of the extension of the second round of the PPP in late February 2021." Prestamos told the Subcommittee that its 925 PPP loans of 2020 went through its own SPARK platform (Subcommittee's Blueacorn documents, letters of Dec. 23, 2021 and Aug. 18, 2022).

The criminal records describe 2020 from the founders' side. Flores stipulated that "Flores and his coconspirators founded Blueacorn in 2020, purportedly to assist small businesses and individuals in obtaining PPP loans," and "charged borrowers kickbacks based on a percentage of the loans that were funded, despite knowing that borrowers were prohibited from using PPP loan proceeds to make such payments" (Flores factual resume, p. 3). Reis stipulated that in April 2020 he "created and submitted fabricated tax documents falsely representing that his company, Juuice Inc., paid employees, including Reis and Stephanie Hockridge," and obtained a loan of about $69,870 (Reis factual resume, p. 3).

The same documents list loans that followed. Qualytics got about $62,610 on May 15, 2020 on a payroll figure Flores admits was false. In July 2020, Flores stipulated, Cota altered a bank statement and Reis made a fake tax document so Flores could apply as a sole proprietor for about $20,006 (Flores factual resume, p. 3). Reis's resume lists further applications "under materially false representations" for Juuice LLC and Body Politix in June 2020, Flores in July 2020, Arriaga and an unnamed "Coconspirator-1" in August 2020, Coconspirator-1 three times in January 2021 and Body Politix again in February 2021.

The superseding indictment, whose allegations Hockridge contested at trial, adds detail. It alleges that Reis's Juuice LLC application claimed $118,000 of 2019 profit, although Reis wrote months later that "Juuice LLC was not active in 2019." It alleges that Hockridge's Body Politix application described the company as a software firm with $110,470 of 2019 net profit (superseding indictment, para. 17).

Blueacorn's contract with Capital Plus Financial, LLC, signed by its subsidiary Fin Cap, Inc. in January 2021, took effect as of October 23, 2020. Capital Plus's parent, Crossroads, was not a party to it.

---

Who Blueacorn was

The companies

"Blueacorn," Reis stipulated, was a name that "Reis and others used multiple entities to do business as" in 2020 and 2021 (Reis factual resume, p. 3). The indictment uses the same definition: Blueacorn "refers to a number of entities that were used by the defendants in 2020 and 2021 to process PPP loans" (para. 8).

Sources: Subcommittee's Blueacorn documents (letter of Jan. 12, 2022, n. 1); Blue Acorn iCi complaint, paras. 2–4; Womply's First Amended Complaint; Blueacorn's motion to dismiss Womply's suit.

The owners, and the two who left

The House report says a Blueacorn operating agreement gave Spirakus 50 percent and Reis and Hockridge jointly the other 50 percent. The report's citation for that agreement reads "Excerpts of the Operating Agreement of Blueacorn PPP, LLC (May 26, 2021) (online at XXX)." The report says Blueacorn declined to give the Subcommittee profit figures by owner (p. 27 and n. 199).

The agreement is dated 44 days after a settlement over who owned Fin Cap. According to the three companies' 2024 complaint against Capital Plus, on April 12, 2021 Capital Plus, Fin Cap, a Wyoming company called YXS Investments and "several other parties" signed a settlement "to settle a dispute relating to the ownership, operation, and management of Fin Cap." Section 1.2(a) required Capital Plus to pay YXS 8 percent of all fees Capital Plus received from the SBA. At YXS's request that money went in equal halves to Proteck, LLC, whose sole member is Cota, and FEFO Group, LLC, whose sole member is Flores (YXS Investments v. Capital Plus Financial, N.D. Tex. No. 4:24-cv-664, Doc. 1, paras. 6–7, 20–24). Blueacorn's lawyers, describing the Capital Plus contract to Congress, mentioned "8% for two of Blueacorn's initial founders, who had since exited." Neither document names both men in the same sentence. Read together, they identify the two departed founders as Cota and Flores.

Flores stipulated one number: "As a result of Flores selling his ownership interest in Blueacorn, he received payments of at least $24 million" (Flores factual resume, p. 4). The resume does not say who paid him, when, or whether any of it came through the 8 percent.

Reis stipulated that "beginning in or around March 2021, Reis was not involved in active participation in the corporate operations of Blueacorn," while he "remained in the conspiracy through in or around May 2021" (Reis factual resume, p. 3). Blueacorn's letter of February 4, 2022 says that people whose names are redacted "exited Blueacorn in April as part of the company's transition to a new senior management team that included non-founding professionals, such as Barry Calhoun as CEO." By November 22, 2021 the Subcommittee addressed its letter to "Mr. Barry Calhoun, Chief Executive Officer, Blue Acorn PPP, LLC" (Clyburn letter). Calhoun later described the company he found as "a fly-by-seat-of-the-pants sort of environment" (House report, p. 23). Matt Yahes was chief operating officer, the House report says (pp. 23, 32).

On June 28, 2021, 33 days after the operating agreement, Reis and Hockridge sued Spirakus in Maricopa County Superior Court with a verified complaint and an application for an order to show cause. Spirakus opposed the application on July 16. The show-cause hearing was reset twice, and on July 23 the couple filed a notice of voluntary dismissal without prejudice (Reis and Hockridge v. Spirakus, No. CV2021-010252, register of actions). The register does not say what they asked for.

Paynerd

Paynerd was two companies. Pay Nerd LLC is a Delaware LLC based in Mountainside, New Jersey, and PayNerdier LLC is a Wyoming company that converted from a corporation to an LLC in June 2021, according to Blueacorn's Delaware complaint. The House report calls Paynerd "a marketing company founded and operated by Blueacorn Strategic Advisor Matt Mandell and Blueacorn Chief Marketing Officer Taylor Hendricksen" (p. 26). The Delaware court describes Mandell as Paynerd's chief executive and co-founder and Hendricksen as a co-founder.

---

How the money moved

The rule

Every dollar Blueacorn received started as an SBA processing fee paid to a lender. For PPP loans made on or after December 27, 2020, the fee on a loan of $50,000 or less was "the lesser of fifty (50) percent or $2,500"; the SBA paid it "not later than 5 days after the reported disbursement," and could take it back only if "the lender is found guilty of an act of fraud in connection with the PPP loan" (86 FR 3692).

The SBA paid lenders only. An agent who helped a borrower apply could be paid at most 1 percent of a loan up to $350,000, by the lender and out of the lender's fee, and could not charge the borrower (85 FR 20811). Blueacorn signed as something else: a lender service provider, doing the lender's own work under contract. Under those contracts, the House report says, Capital Plus and Prestamos gave it "the majority—up to 70 percent—of the processing fees that they received from the SBA" (House report, p. 23).

The two lender contracts

Fin Cap's contract with Capital Plus, Blueacorn's lawyers wrote, was executed in January 2021 "with an effective date of October 23, 2020, and was updated in February 2021." The House report quotes it as having Blueacorn provide "staff services" to Capital Plus "to carry out certain functions related to the PPP Loan Portfolio rather than hiring employees directly" (House report, p. 22). Blueacorn described its pay this way in a letter of January 12, 2022:

Capital Plus – Blueacorn's compensation from Capital Plus consisted of: (i) an initial 20% share of SBA fees received by Capital Plus for each loan (with 50% of this amount held back until the borrower applied for SBA forgiveness for the underlying loan), which compensated Blueacorn for the amount that Blueacorn paid marketers to advertise on the internet; and (ii) 41% of the remaining SBA fees (and 8% for two of Blueacorn's initial founders, who had since exited)…

Prestamos – Blueacorn earned 70% of the SBA fees received by Prestamos for each loan, with 10% of Blueacorn's share held back until the borrower either completed a forgiveness application or the loan matured.

(Subcommittee's Blueacorn documents.) The founders' 2024 complaint quotes a different sentence from Schedule A of the Capital Plus contract: Capital Plus agreed to "pay 47% of the total fees received on all PPP loans funded by [Capital Plus] during the time of this agreement to [Fin Cap] within five (5) business days upon receival of fees from the [SBA]" (YXS complaint, para. 19). The public record does not show whether the 47 percent is the original version and the 20-plus-41 formula the February 2021 update. Neither version of the contract has a source document on this site.

According to the House report, Prestamos signed its agreement on April 14, 2021, for Blueacorn to engage "in the origination, marketing, underwriting, and funding of loans" (House report, p. 22).

Say a sole proprietor borrowed $15,000 in 2021, and the SBA paid her lender $2,500. At Prestamos, Blueacorn's share was $1,750, with $175 held until forgiveness. At Capital Plus, on Blueacorn's own description, it was $500 up front, half of that deferred, plus 41 percent of the remaining $2,000, or $820: $1,320 in all. The settlement's 8 percent sent another $200 to the departed founders' companies if it ran on the whole fee, as their complaint describes it, or $160 if it ran on the fees left after the first 20 percent, as Blueacorn's letter can be read. Capital Plus kept $980 to $1,020 before its own costs. (Computed from the terms quoted above.)

The payments out

Blueacorn paid its marketers the way it was paid. Its "primary marketing strategy involved engaging third-party referral agents," who placed ads that sent applicants to Blueacorn's website, and "these partners shared a percentage of Blueacorn's revenue on funded loans." It named five: "PayNerd/PayNerdier, OpenForce, VIPP, Elev8, and MooveGuru" (letter of Mar. 25, 2022). The letter does not say what VIPP was.

Paynerd had two referral contracts: one of February 2021 between Fin Cap and Pay Nerd, and one of April 2021 between Blueacorn PPP and PayNerdier (Delaware opinion of Aug. 16, 2023). Both priced each loan by where the applicant came from: "PayNerd Generated," "Company Generated" or "Blueacorn Generated." Blueacorn alleged in Delaware that from early April 2021, as the first lender received its SBA fees, it "would promptly wire a fixed percentage of those fees—well over half of Blueacorn's share—directly to PayNerd," as an advance to be reconciled later (Blueacorn's Delaware complaint, public version, in the Subcommittee's Blueacorn documents).

Womply came in last. At what Blueacorn called "a point when Womply's portfolio of non-CDFI lenders no longer had the ability to make loans for borrowers already in processing," BA Fin Orion and Womply (Oto Analytics, Inc.) entered a Referral Agreement and a Developer Order Form, both dated May 10, 2021; Womply says it executed them on May 19. Womply would send applicants to Capital Plus through Blueacorn and supply technology. Its pay was a referral fee of 1 percent of each loan and a technology fee of "the first $250 from any Lender Processing Fee, plus 1/3 of the remaining," reduced by the referral fee, due "within five (5) days after Blueacorn receives its fees from the lender" (First Amended Complaint and exhibits). Womply listed Blueacorn as a partner from May 10 to September 17, 2021, and footnoted: "Blueacorn is the Lender Service Provider to Capital Plus Financial, LLC. Womply provided technology services to both Blueacorn and Capital Plus pursuant to Womply's agreement with Blueacorn" (Womply's response to the Subcommittee, Apr. 14, 2022, pp. 14–15).

On the same $2,500 fee, Womply's formula came to $1,000. Blueacorn's share from Capital Plus was $1,320. On a Womply loan, Blueacorn would have kept $320.

Each company in the chain was paid out of the same SBA fee, so the figures do not add. Blueacorn's $1.08 billion is part of the two lenders' fees, and Paynerd's $666 million and the owners' $258 million are parts of Blueacorn's $1.08 billion.

---

Scale: 739,282 applications, by Blueacorn's count

Blueacorn told the Subcommittee that more than 4.1 million people started an application and more than 1.7 million formally submitted one after initial screening. It "approved and sent to lenders 739,282 PPP loan applications for funding in 2021." It claimed it "ultimately support[ed] 808,000 small business owners / sole proprietors via disbursement of $12.5 billion in SBA PPP funds," which the report said was more PPP money in 2021 than JPMorgan Chase (House report, pp. 21–22). A June 2021 press release put the total at "approximately $14 billion" for more than 860,000 businesses (press release). In February 2022 its lawyers put it at "nearly $12 billion in PPP loans" for "approximately 750,000 small businesses" (letter of Feb. 4, 2022).

The lenders counted separately. Prestamos said about 439,622 of its loans were "processed and funded through the Blueacorn Platform" in the third round, out of about 551,153 applications submitted to the SBA (letter of Aug. 18, 2022). Capital Plus wrote on July 22, 2022: "Blueacorn submitted a total of 521,221 loan applications to the SBA on behalf of Capital Plus. For 106,925 of those loans, the borrowers had originally applied through Womply" (Subcommittee's Blueacorn documents).

The SBA's loan-level file puts 444,780 PPP loans ($6.85 billion) at Prestamos and 395,359 ($6.21 billion) at Capital Plus: 840,139 loans and $13.06 billion (Blueacorn network). That is a ceiling for Blueacorn, because it includes Prestamos's 925 loans of 2020 and any 2021 loans either lender made without Blueacorn.

The Womply loans were counted three ways. Womply said it "referred 86,521 PPP loans to Capital Plus through Blueacorn." Blueacorn said it "facilitated and ultimately approved approximately 86,000 loans" under the Womply agreement. Capital Plus said 106,925 of the applications Blueacorn submitted for it had started at Womply.

Who the loans reached

In 2021, 99.9 percent of Blueacorn's two lenders' loans went to businesses reporting fewer than 10 jobs, and 45 percent went to businesses in low- or moderate-income areas, against 31 percent of all PPP loans that year (SBA loan-level data). Blueacorn said it worked "predominantly" for independent contractors, freelancers and gig workers (House report).

Loans approved in 2021, from the SBA's loan-level file (2024 release). The file names only the lender, so the first column is a ceiling for Blueacorn.

---

Underwriting and fraud control

What the lenders bought

The loans were the lenders' loans. Under SBA rules, as the House report quotes them, Capital Plus had to "exercise[] day-to-day responsibility for evaluating, processing, closing, disbursing, servicing, liquidating, and litigating its SBA portfolio" (House report, p. 43). The Subcommittee's report said both lenders "largely delegated their fraud prevention and eligibility verification functions to Blueacorn" (p. 20). Blueacorn had promised Capital Plus it would "process[], underwrite[], approve[] & fund[] loans that qualify for the PPP," with a "proprietary document intake engine [that] allows our team to process certain types of [PPP] applications in 5 minutes" (p. 22). It promised Prestamos an "extensive vetting and approval process." Prestamos told the Subcommittee that "the majority of the [PPP processing] workflow was going to go through [Blueacorn]" (p. 22).

Capital Plus told the Subcommittee it "does not maintain statistics regarding the number of PPP loan applications that were manually reviewed by Capital Plus personnel" (p. 43). Prestamos said it spot-checked certain loans and that the checks were "not formally logged or documented" (p. 44).

Who did the reviewing

Blueacorn said it had "one direct employee who assisted with processing PPP loan applications" and "almost exclusively relied on third-party companies and contractors." Contractors were paid $37 to $55 an hour, or $2 to $8 per application reviewed, "regardless of whether the application was approved or denied" (letter of Jan. 12, 2022). Three staffing companies, TEK Systems, HireRising and Evergreen, supplied temporary reviewers; Everett Advisors and Elev8 advised on compliance (letter of Mar. 25, 2022).

Elev8 had "just a single employee, according to an August 2021 PPP loan forgiveness application." A former contractor told the Subcommittee that Adam Spencer "hired at least 30 of his closest friends and family to work as underwriters," and the report said the Spencers' children worked as reviewers; Kristen Spencer called her teenaged son a "really strong underwriter" in a message to Hockridge. A reviewer told the Subcommittee that Kristen Spencer said "she was the fraud department." Elev8 brought in Business Warrior, a public company, whose president said its staff could review an application in 90 seconds, 40 an hour; Blueacorn agreed to pay it three dollars per application (House report, pp. 24–26, 33).

What the reviewers were told

The Subcommittee obtained Blueacorn's "PPP Processing Script," the reviewers' "primary resource." It said changes were being made "in response to feedback that [reviewers] were marking too many documents as fraudulent," and instructed: "if you are doubtful of a document authenticity but are not certain, the rule of thumb is to accept it." The script, as the report quotes it, told reviewers to flag only "extremely obvious fraud," such as applications in the name of "Ronald McDonald" or at "123 ABC Lane," and not to check driver's licenses against examples of genuine ones (House report, pp. 30–31).

Kristen Spencer wrote in Slack that COO Matt Yahes told her to "do nothing outside of making sure [eligibility reviewers] get through 5000 files a day." Blueacorn's IT consultant replied, "oy vey, that's a lot haha" (p. 32). A former Elev8 contractor said reviewers were told each review "should take you less than 30 seconds" (p. 33).

A former reviewer's complaint to the SBA's Inspector General quoted what Blueacorn leadership had told the reviewer: "We are not the fraud police. Even if the applicants are submitting fraudulent documents, we are covered by the applicants['] attestation that what they are submitting is truthful, and even fraud will help stimulate the economy." And: "We want you to submit. The more you submit, the more we get paid" (p. 28). The report's title quotes the first sentence.

Asked about the Processing Script, Blueacorn told the Subcommittee that it was "likely" Paynerd's Mandell who had complained that reviewers flagged too much, that he "regularly suggested to Blueacorn leadership that Blueacorn's increasingly rigorous system was too sensitive," and that his "company [Paynerd] was compensated only for marketing leads that ripened into completed loans." The report answered that Blueacorn's "own revenue and the compensation of many of its executives was also tied to the number of applications that ripened into completed loans" (p. 31). Blueacorn also said "individual reviewers were ill-suited to identify any but the least sophisticated fake identification documents" and pointed to an "enhanced due diligence" review. That review began on June 11, 2021 (p. 32). The program had stopped taking applications on May 31.

The software

Blueacorn said it used "high-quality, proprietary lending software and fraud detection tools." Its own list of tools named four subscriptions: Plaid, Giact, Onfido and IDology. At the end of March 2021 it began using IDology's knowledge-based questions, found them "quite difficult" for many applicants and saw a large number flagged. In early April 2021, the report says, it made Onfido its primary identity check and sent applicants to IDology only if they failed Onfido or were flagged later (House report, p. 33).

Some borrowers were paid on prepaid cards. Prestamos said that where a borrower's bank had raised questions, "prepaid debit cards were used in that circumstance 13,343 times. The cards were authorized by Blueacorn and provided by Dash" (letter of Aug. 18, 2022).

VIPPP and large loans

Blueacorn tagged some applications "VIPPP." The House report says Hockridge managed them "outside of the standard Blueacorn workflow" and quotes her telling a contractor: "no need to put your spot=checker [sic] on it--the file is good…just needs approval from someone other than me…since it's in my channel" (p. 35). She wrote to Kristen Spencer: "I have a $1.9M deal that's been sitting in UW [underwriting] Ready for 5 DAYS!!! I don't need to tell you how much Blueacorn makes off that loan alone," and "closing these monster loans will get everyone paid" (p. 34). A $1.9 million loan paid its lender a 3 percent fee, $57,000; at Prestamos's 70 percent, Blueacorn's share would be $39,900. That is about the same as on 23 small loans at $1,750 each (computed from the fee schedule and the Prestamos split).

The criminal cases later described VIPPP as a fee business. The superseding indictment alleges that "Reis, Hockridge, and their coconspirators also made money through a Blueacorn program called 'VIPPP'" and "charged VIPPP borrowers fees based on a percentage of their loans that were funded" (para. 16). Flores stipulated to the same description (factual resume, p. 4). Elev8's representatives told the Subcommittee that Reis and Hockridge had tried to charge some applicants up to 10 percent of the loan (House report, p. 36).

Insiders' loans

The Subcommittee counted more than $650,000 in PPP loans to Blueacorn leaders and their close associates, including nearly $300,000 to Reis, Hockridge and their companies, nearly $200,000 of it through Blueacorn or its two lenders. A review supervisor said there were no formal controls on insider loans. On June 8, 2021 Capital Plus's chief financial officer, Farzana Giga, asked Blueacorn for a list of insider loans; Blueacorn identified 11, and Reis and Hockridge repaid more than $100,000 of them in July 2021 at Capital Plus's request. At least six of their loans, totaling at least $165,124, were forgiven. The report said that in an application signed February 5, 2021 Reis "falsely claimed to be both a military veteran and an African American," contradicting his other applications (House report, pp. 36–38).

The reviewers' supervisors also borrowed through Blueacorn. In March 2021 the Spencers, two of their sons, two other relatives and Kristen Spencer's company received Capital Plus loans totaling more than $117,000, all forgiven. Hockridge had told Spencer: "Just make sure Jack [Blueacorn's underwriting manager] underwrites your applications, since he's not one of your employees" (p. 39).

The budget

The cash-flow statement put fraud prevention at $8,682,207, 0.79 percent of Blueacorn's income, and eligibility verification at $13,713,563, 1.26 percent (p. 27). Spread over the 739,282 applications Blueacorn approved, fraud prevention came to $11.74 each; over the 1.7 million submitted, $5.11. The $666 million paid to Paynerd was 77 times the fraud-prevention line. (Per-application figures computed from Blueacorn's counts.)

---

Money in and money out

"Reported" means Blueacorn's own unaudited statement as the House report describes it; the statement itself, "Blueacorn Group Simplified Cash Flow Statement" for January 1, 2021 to February 28, 2022 (Bates BA-SSCC-0000121-22), has not been made public.

Sources: House report; Subcommittee's Blueacorn documents; Flores factual resume; Fin Cap Inc. v. PayNerd LLC, Del. Super. (Aug. 16, 2023); Womply First Amended Complaint; Crossroads FY2023 audited financial statements; Reis judgment; Hockridge judgment; Flores amended judgment; YXS complaint, N.D. Tex. No. 4:24-cv-664, Doc. 1.

The two lender payments sum to $1.086 billion; the report's percentages imply about the same denominator. Paynerd's $666 million and the owners' $258 million together took 85 percent of it. Blueacorn's February 2022 letter said it had "itself spent in excess of $700 million dollars on the operational expenses associated with the services it provided to the lenders, including payment for marketing and referral services, eligibility verification services, customer service support, fraud prevention, and technology development and infrastructure costs." Of that, $666 million was the first item on the list, paid to one firm.

Three founder figures appear in the record and none should be added to another. The House report's $258 million is its reading of what Blueacorn's unaudited statement shows was distributed to the owners. Flores's "at least $24 million" came from selling his interest, and the record does not say whether it was paid out of Blueacorn's cash, out of the 8 percent that Capital Plus paid straight to the founders' companies, or from somewhere else. Paynerd's "over $180 million" in "buyouts" is Paynerd's allegation; the Delaware court ruled only that Blueacorn had no implied duty to Paynerd about such payments, and made no finding that they happened.

Blueacorn's share was a share of the lenders' fees. By its own February 2022 count, it received about $1.03 billion of about $1.84 billion in lender fees. The rest stayed with Prestamos and Capital Plus, less what they owed for holdbacks and any other agents. Their side is in the Prestamos and Capital Plus profiles and in the fee-collector pieces How Much Did Blueacorn Make From Pandemic Relief? and How Much Did Capital Plus Financial Make From Pandemic Relief?.

---

The criminal case: United States v. Reis and Hockridge

N.D. Tex. No. 4:24-cr-287-O, Fort Worth, Chief Judge Reed O'Connor. Status as of the last docket entry available, June 24, 2026. (Case filings.)

The charges

A grand jury indicted Reis and Hockridge under seal on November 14, 2024 on one count of conspiracy to commit wire fraud and four counts of wire fraud, with a forfeiture notice (indictment). The indictment was unsealed on November 21, 2024, when Reis was arrested in Puerto Rico (D.P.R. No. 3:24-mj-1109); Hockridge was summoned.

The superseding indictment of May 8, 2025 charged a conspiracy running from about April 2020 to May 2021. It explains why the case was in Fort Worth. Its four wire-fraud counts are four transfers of PPP money on February 17, March 1, March 3 and March 10, 2021. All four came from "Bank-1," "a financial institution headquartered in Happy, Texas," whose servers were in the Northern District of Texas and which received Federal Reserve funds "into an account held by Lender-2" to fund PPP loans. Lender-2 is "a CDFI headquartered in Bedford, Texas," which is where Capital Plus is. By the indictment's account, one of the four transfers funded Hockridge's own Body Politix loan; three funded loans to "Coconspirator-1" (superseding indictment, paras. 5–7, 17–19). Hockridge's lawyers argued that the bank's transfers could not establish venue because they were not acts of any conspirator's agent: "Happy State Bank is merely a depository branch for Capital Plus" (Doc. 216, June 19, 2025).

Trial and verdict

Hockridge went to trial in June 2025. On June 20, the seventh day, the jury found her guilty on Count 1s, the conspiracy, and not guilty on Counts 2s through 5s, the four wire transfers (Docs. 223, 224). She was taken into custody and then released on house arrest. The Justice Department announced the conviction (DOJ, June 2025).

Between September and November 2025 the court denied her renewed motion for acquittal, her motions for a new trial and the defendants' joint motion to compel discovery (Docs. 310, 348, 354).

Reis's plea

Reis signed a plea agreement and factual resume on August 6, 2025 and pleaded guilty to Count 1s on August 11 (Docs. 272, 273, 276). The government agreed to recommend a sentence no higher than the bottom of the guideline range or 120 months, "whichever is greater," a recommendation the court did not have to follow. Reis agreed to pay restitution for "all loss resulting from the offense of conviction and all relevant conduct" and not to contest forfeiture of the property named in the superseding indictment. He gave up his right to appeal except for a sentence above the statutory maximum, an arithmetic error, or "the loss amount determined by the Court … if the Court finds that it exceeds $3,500,000" (plea agreement, Doc. 273, paras. 7, 9–10, 14).

His stipulated facts: "Through Blueacorn, Reis and his coconspirators submitted and caused to be submitted PPP loan applications that they knew contained materially false information in order to make more money, causing Lender-2, based in Bedford, Texas to transfer loan funds to borrowers," and "charged borrowers fees based on a percentage of the loan amounts that were funded" (Reis factual resume, p. 3).

Sentencing

Before Reis's sentencing he argued that the government's method for identifying fraudulent applications was flawed and that the fraud of Eric Karnezis, who submitted applications through Blueacorn, should not count against him. The court overruled his loss objections and refused to let him call Karnezis, whose statements from a government interview, from Hockridge's trial, from text messages with Reis and from "Karnezis's own memoir" were already in the record. It sustained his objection to a two-level abuse-of-trust enhancement and overruled his objections to enhancements for sophisticated means and for being an organizer or leader (order of Dec. 16, 2025, Doc. 385).

Sources: Hockridge judgment (Doc. 362); Reis judgment (Doc. 390).

The $2,085,985.63 difference between Reis's two figures (computed) is owed by him alone. Neither judgment imposed a fine. Both gave the same reason: the defendant "does not have the financial resources or future earning capacity to pay a fine" in addition to restitution.

The Justice Department said Reis and his co-conspirators "processed over 530 fraudulent loans causing over $65 million in losses" (DOJ, Dec. 18, 2025). Those 530 loans are about 0.07 percent of the 739,282 applications Blueacorn says it sent to lenders in 2021. Its release on Hockridge said the evidence at trial showed that "to get more kickbacks from borrowers and a higher percentage of lender fees from the SBA, Hockridge and her co-conspirators submitted PPP loan applications that they knew contained materially false information" (DOJ, Nov. 21, 2025).

Both indictments carried forfeiture notices, and Reis agreed not to contest forfeiture. No forfeiture order appears in the docket entries through June 24, 2026.

Custody and appeals

Hockridge appealed on December 5, 2025 (Fifth Circuit No. 25-11332) and Reis on December 29, 2025 (No. 25-11394). On June 24, 2026 the Fifth Circuit granted the government's opposed motion to add Hockridge's sentencing transcript to the record of Reis's appeal (Doc. 476). ABC15 reported on August 25, 2026 that argument in Hockridge's appeal was tentatively set for November. Her appeal claims that the court excluded exculpatory exhibits, misinstructed the jury and tried her in the wrong venue; prosecutors argue that the evidence of guilt was overwhelming, the station reported (ABC15).

Hockridge had not reported to prison as of the last docket entry. The court moved her surrender date to January 30, 2026 (Doc. 395) and, on May 19, 2026, to December 1, 2026, "while it considers Defendant's request for release pending appeal and/or staggered sentence" (Doc. 466). ABC15 reported in August 2026 that Reis was serving his sentence in an Oregon prison and that a judge had let Hockridge travel to visit him in August and September.

The trusts

After sentencing the government served writs of garnishment on two trust firms, SEI Private Trust Company and Balentine, LLC, under the Federal Debt Collection Procedures Act. In an opinion of April 28, 2026, filed the next day, Judge O'Connor described what their answers showed:

From July to November 2022, Reis transferred over $46 million to the Nathan J Reis 2022 Irrevocable Trust and the Nathan J Reis Family Protection Trust (now named the Mint Legacy Trust and the Mint Family Trust), and Hockridge transferred over $29 million to the Stephanie Reis 2002 Irrevocable Trust and the Stephanie Reis Family Protection Trust (now named the Marietta Legacy Trust and the Marietta Family Trust).

The trusts were created under Nevada law and "originally funded by Defendants' personal brokerage accounts." The defendants called the transfers "legal and commonplace estate planning." The court ruled that the trusts "hold Defendants' assets as Defendants' nominees." It weighed the usual factors. The trusts gave no consideration, which the court treated as neutral because Nevada law does not require it. Two trusts had been named "Family Protection Trust." Defense counsel had once suggested that the defendants' "estate planning" would be "sufficient to satisfy any potential monetary liability under the Government's theory at the time." Both defendants had served as family trustees; Hockridge is a beneficiary; and "one of the current family trustees is Defendant Hockridge's father." The defendants did not deny "the millions of dollars disbursed from the Trusts to pay for, amongst other things, Hockridge's 'living space' and Defendants' legal fees." The court added that restitution collection needs no tracing to crime proceeds and that a garnishment is no place to attack the restitution order (United States v. Reis, N.D. Tex. No. 4:24-cr-287-O, Doc. 455, pp. 2, 4–9). The final order of garnishment is Doc. 456. Earlier, on February 10, 2026, the court had refused the defendants' requests to move the garnishment to the District of Puerto Rico (Doc. 429).

At sentencing the court had found that neither defendant could pay a fine on top of restitution. In April 2026 it found that trusts funded with more than $75 million of their money held their assets as nominees.

The Justice Department announced that the United States "expects to recover nearly $30 million in restitution through these enforcement efforts" (DOJ, May 19, 2026). The release does not explain the gap between $30 million and the $75 million transferred.

No document we have shows that recovery. Reis, Hockridge and a family trustee, Billy Hockridge, appealed on May 1, 2026 (Docs. 458–460; Fifth Circuit Nos. 26-10440 and 26-10441, the trustee's number not shown). The court stayed the final order that day (Doc. 462), and on June 8, 2026 signed a stipulation staying it "pending the final outcome of the Garnishment Appeals, including decisions in connection with any requests for hearing en banc and petitions for certiorari and issuance of a final mandate," "except as provided herein" (Doc. 472). The exceptions are in the order, which is not public on the free docket. Separately, on May 4, 2026 the government moved for a finding of default and an order of sale against Reis, and Reis cross-moved to stay "the restitution condition" pending appeal (Docs. 464, 465); neither had been decided by June 24, 2026. No document we have shows whether Reis paid the $2.5 million or sold the condominiums. ABC15 reported in August 2026 that the couple "have not been required to pay pending that appeal" of the restitution order.

Flores, Cota and Arriaga

The three "volunteers" from the February 2021 About page were prosecuted separately before Judge Terry R. Means.

• James Flores (N.D. Tex. No. 4:24-cr-306-Y) was charged by information on December 5, 2024 and pleaded guilty on December 11 to conspiracy to commit wire fraud (information; factual resume). On September 17, 2025 he was sentenced to 41 months and three years of supervised release (judgment). An amended judgment of September 25 set his joint restitution with Reis and Hockridge at $64,391,256.84, down from $64,844,573.00, plus smaller joint amounts of $45,617.75 with Arriaga and $83,929.49 with Cota (amended judgment). His joint figure with the couple is $439,193.20 more than theirs with him (computed); the documents do not explain the difference.
• Michael Cota (No. 4:24-cr-5-Y) pleaded guilty on January 31, 2024 to conspiracy to commit wire fraud under 18 U.S.C. § 371. He was sentenced to three years of probation, with $1,844,410.40 in restitution jointly and severally with Flores, $45,617.75 of it also with Arriaga (judgment). Flores's judgment gives the Cota joint amount as $83,929.49.
• Vivian Arriaga (No. 4:24-cr-6-Y) pleaded guilty on February 7, 2024 and was sentenced to three years of probation, a $5,000 fine and $70,955.88 in restitution (judgment).

In September 2022 Cota and Arriaga sued Jason and Lyrit Edmunds and five Fawkes companies in Maricopa County Superior Court. A receiver was appointed in 2023, and the court ordered Binance and Nexo to turn over account access. After Cota and Arriaga applied to confirm an arbitration award, the court entered judgment on October 18, 2024 against Jason Edmunds for $708,082 in principal, $1,784,737 in attorney fees, $239,615.69 and $68,038.86 in costs and $10,504.68 in interest (Arriaga and Cota v. Fawkes Global, No. CV2022-011826, register of actions). The Edmundses filed for Chapter 7 bankruptcy in January 2025 and listed Cota and Arriaga's claim at $2,819,969.00, marked disputed (Edmunds bankruptcy schedules, Bankr. D. Ariz. No. 2:25-bk-00864, Doc. 14, p. 23).

The law firm Cohen Dowd Quigley sued Cota and Arriaga in December 2023. In August 2025 it won judgment against Arriaga for $208,199.49 in principal plus interest, fees, costs and charges, $408,121.90 in all (Cohen Dowd Quigley v. Arriaga, No. CV2023-019603, register of actions). Arriaga and Cota appealed, and on June 16, 2026 the Arizona Court of Appeals affirmed in a memorandum decision; it later awarded the firm $11,440 in attorney fees and $212.39 in costs on appeal. A petition for review was filed in the Arizona Supreme Court on July 16, 2026 (Cohen Dowd Quigley v. Arriaga, No. 1 CA-CV 25-0774, Arizona Court of Appeals docket). Flores is one of four defendants in a suit Anjanette Pariani filed in May 2025; the others are FIFO Capital Inc, FEFO Group LLC and Global Government Partners LLC. On a stipulation for entry of judgment, the court entered judgment against Flores alone in January 2026 for $128,134.19 in principal plus interest, fees and costs, $185,797.71 in all (Pariani v. Flores, No. CV2025-017026, register of actions).

The Karnezis brothers

Eric and Anthony Karnezis are brothers from Sedona, Arizona. The Justice Department said Eric Karnezis submitted "at least 350 fraudulent Paycheck Protection Program (PPP) loan applications through Blueacorn, a lender service provider, to Capital Plus Financial," and at least 1,300 applications in all, which "attempted to obtain at least $178 million from Capital Plus Financial, of which approximately $105 million in loans were funded." He "required applicants to pay a fee" and received about $3 million. Anthony Karnezis submitted at least 140 fraudulent applications "through Blueacorn, to Capital Plus Financial," with more than $3.9 million funded and more than $957,000 to him. Eric was indicted in Oregon on August 21, 2024 and pleaded guilty on March 20, 2025; Anthony was charged by information on February 19, 2025 and pleaded guilty on March 21. The department said that in their plea agreements Eric agreed to pay between $25 million and $65 million in restitution and Anthony between $3.5 million and $9.5 million (DOJ, Mar. 21, 2025). Their sentences are not in any record we have.

Reis's restitution is joint with both brothers. He had argued that Eric Karnezis's fraud should not count against him, and the court overruled the objection (Doc. 385). In Oregon, a co-defendant of Eric Karnezis, Fredrico Williams, moved in March 2026 to compel the government's Blueacorn and Capital Plus evidence. He argued that every count names Capital Plus as the victim lender while "every PPP application in Williams's case" went through Blueacorn (United States v. Karnezis, D. Or. No. 3:23-cr-67-IM, Doc. 152). The court ruled on the motion on July 31, 2026 (Doc. 192); that order is not public on the free docket.

Other prosecutions that name Blueacorn

Blueacorn appears in at least 25 other federal cases against borrowers and preparers. Prosecutors described it in their own words:

• "Prestamos CDFI works jointly with Blue Acorn, its information technology partner, to ingest, evaluate, process, and approve PPP applications. Blue Acorn maintains computer servers in Virginia which ingested this PPP application" (United States v. Campbell, S.D. Ala. No. 1:21-cr-161, indictment, Sept. 29, 2021).
• "Blueacorn would transmit PPP loan applications to approved lenders including Prestamos CDFI, Capital Plus Financial, and Benworth Capital" (United States v. Eley, E.D. La., bill of information).
• "Blueacorn was a financial technology company which processed PPP applications on behalf of financial institutions, including Capital Plus Financial and Prestamos" (United States v. Kavroulakis, N.D. Ill. No. 1:25-cr-382, indictment). On September 10, 2026, co-defendant Hassan Kurdi pleaded guilty to Count Two of the indictment (Change of plea order for codefendant Hassan Kurdi, Doc. 119).
• "Prestamos partnered with Blue Acorn PPP, LLC to service the PPP loans. Blue Acorn was also based in Arizona" (United States v. Holmes, M.D. Ga. No. 5:25-cr-54, indictment, Nov. 18, 2025).
• "Loan processors including Blueacorn, Womply, Bluevine, and Kabbage routed the falsified applications to SBA-approved lenders" (DOJ on the indictment of Latrina Dorsey and Dushawn Nelson, Aug. 21, 2026).

On August 12, 2026 a federal judge in New Orleans ruled Blueacorn's records, Bates-numbered 000285 to 000859, admissible as business records in the trial of a borrower (United States v. Roberson, E.D. La. No. 2:25-cr-210, Doc. 61).

---

The civil disputes

Blueacorn v. Paynerd (Delaware)

Fin Cap and Blueacorn PPP sued Pay Nerd, PayNerdier, Mandell and Hendricksen in Delaware Superior Court on December 23, 2021 (No. N21C-12-118). Blueacorn's lawyers told Congress the suit sought "to recover at least $175 million in payments it made to its principal provider of marketing services."

The complaint alleges that an August 2021 reconciliation showed Blueacorn had overpaid; that Paynerd "controls the automated coding" deciding which rate applied; and that it billed nearly 86,000 organic loans at the "more generous" Paynerd rate. The dollar figures in the public version are redacted. An amended complaint of April 18, 2022 pleaded breach of both referral contracts, fraudulent inducement, negligent misrepresentation, a declaratory judgment on the "Company Generated" formula and an Arizona Consumer Fraud Act claim.

Paynerd's counterclaims of December 21, 2022 allege breach of both contracts and fraudulent inducement by Fin Cap, Reis and Spirakus and by Fin Cap, Blueacorn and Calhoun. They allege that Blueacorn claimed the "back-end technical sophistication to process over 10,000 PPP loan applications per day," a team that could "competently scale its personnel numbers . . . to handle over 10,000 PPP loan applications originating from PayNerd per day," and a Calhoun assurance that earlier mismanagement had been fixed. They also allege that Blueacorn manipulated Salesforce data to avoid paying Paynerd, left "approximately 130,000 [SBA] approved loans" unsubmitted for funding, and paid "buyouts of over $180 million to its founders and other executives."

On November 3, 2022 the court left Blueacorn's breach, fraudulent-inducement, declaratory and consumer-fraud counts standing and sent the negligent-misrepresentation count to the Court of Chancery. On August 16, 2023 it let Paynerd's breach and fraudulent-inducement counterclaims proceed, denied Reis's separate motion to dismiss, ruled that Blueacorn had an implied duty "to maintain accurate Salesforce records," found no implied duty covering internal mismanagement or the buyouts, and dismissed Paynerd's quasi-contract counterclaims. Whether the alleged misrepresentations were "beyond mere puffery or fraud in hindsight will be determined in the context of evidence" (opinion). On January 29, 2024 the same judge, sitting in Chancery, declined "at this time" to dismiss Blueacorn's negligent-misrepresentation claim (Blueacorn PPP, LLC v. Pay Nerd LLC, 310 A.3d 590).

In May 2024 Paynerd obtained a Texas deposition subpoena for Capital Plus's chief financial officer, Farzana Giga, in aid of the Delaware case (Denton County No. 24-4384-431; served May 20, 2024). We found no Delaware ruling after February 2024, no judgment and no settlement. The rulings we found decide whether claims were pleaded well enough and which court hears one of them; none decides whether either side's allegations are true.

Fin Cap (Blueacorn) v. Capital Plus

By 2023 Blueacorn and Capital Plus were fighting over unpaid fees. In March 2023 Blueacorn filed an arbitration demand against Capital Plus (the party to the contract, and the plaintiff in the later court filings, is Fin Cap, Inc.) "alleging breach of the parties' Loan Service Provider Agreement relating to Paycheck Protection Program ('PPP') loans claiming fees owed." Capital Plus counterclaimed in May 2023. On August 24, 2023 the arbitrator granted Capital Plus interim "access to a wide range of loan-related documentation," and Capital Plus posted a $5 million bond. A hearing was set for February 2024. Capital Plus's parent, Crossroads Impact Corp., disclosed for the group: "Prior to the arbitration, the Company had accrued $80 million in fees due to BlueAcorn. While the Company disputes that these amounts are owed, the Company has maintained this accrual pending the outcome of the arbitration" (Crossroads FY2023 audited financial statements, note 19). A copy of an application by Fin Cap for prejudgment writs against Capital Plus bears the file stamp of the 352nd District Court of Tarrant County, Texas (No. 352-341122-23, March 23, 2023); the filing has no source document on this site, and its outcome is not in the record. It named Evolve Bank & Trust and Crossroads Systems, Inc. d/b/a Crossroads Impact Corp. as garnishees, seeking Capital Plus's bank accounts and "Crossroads' intercompany debt to Capital Plus" (application, para. 35).

The Crossroads group's later quarterly statements show its consolidated accrued liabilities falling from $134,571,512 on October 31, 2023 to $102,356,487 on April 30, 2024 and $76,322,380 on July 31, 2024. In the quarter to April 30, 2024 Capital Plus's "PPP processing fees" expense line was a credit of $15,005,881. On July 31, 2024 the accrued liabilities in Capital Plus's column of the consolidating schedule were $69,978,515, less than the $80 million accrual alone (Crossroads Impact Corp quarterly financial statements for the periods ended Apr. 30 and July 31, 2024). The arbitrator's award is dated April 29, 2024, a day before the quarter with the credit ended. Capital Plus's own reconciliation of December 21, 2022 had a "BA Holdback" row of $15,005,951.01 and a "Paynerd" row of $21,746,478.66 in a "Total accrual" of $109,039,087.00 (Tarrant County application, p. 7). The statements do not say why the expense line turned negative.

In April 2025 Fin Cap sued Capital Plus in federal court in Phoenix (Fin Cap Incorporated v. Capital Plus Financial LLC, D. Ariz. No. 2:25-cv-1122); Crossroads is not a party. Fin Cap asked the court to confirm the arbitrator's Final Award of April 29, 2024 and filed the award under seal (application). On the parties' stipulation the court confirmed the award and ordered judgment "in favor of Blueacorn and against Capital Plus Financial, LLC as described in the Final Award" (order); the clerk's amended judgment of May 21, 2025 closed the case (amended judgment). The award is still under seal, and its total is not public. Fin Cap's application says that "a portion of funds has been paid and resolved" between Capital Plus and Blueacorn, but that Capital Plus "continues to hold $19,796,022.81 in a liability reserve" that the arbitrator found "is now payable." By the application's account, the arbitrator said the money should be paid to PayNerd, LLC, "absent evidence that PayNerd acknowledges the amounts may instead be paid to Blueacorn or a final determination in a proceeding to which PayNerd is a party ruling that Blueacorn is entitled to the funds." Blueacorn told the court that confirmation "will not resolve the dispute over the Liability Reserve," and that its Delaware case against Paynerd "may resolve the disposition of the funds" (application, paras. 10–14).

BA PPP Fin v. Prestamos

On January 8, 2026 BA PPP Fin, LLC, the subsidiary that signed the Prestamos contract, sued Prestamos CDFI, LLC in Maricopa County Superior Court to confirm an arbitration award. The register lists as third-party defendants two companies it spells "Blueacord Tech Inc" and "Blueacord P P P, L L C" and a third, Blue Oak Forest LLC. Two notices of errata to the application and a motion to seal exhibits followed, and on February 2, 2026 a judgment marked final was filed (BA PPP Fin, LLC v. Prestamos CDFI, LLC, No. CV2026-001079, register of actions). The register shows no amount, and we do not have the award.

The founders v. Capital Plus

The departed founders' companies sued Capital Plus Financial, LLC; its parent, Crossroads Systems, Inc. d/b/a Crossroads Impact Corp., which they alleged was Capital Plus's alter ego; Eric Donnelly, Capital Plus's chief executive until August 2021 and Crossroads' chief executive since 2017; and Giga, chief financial officer of both, on July 17, 2024 over the 8 percent (YXS Investments v. Capital Plus Financial, N.D. Tex. No. 4:24-cv-664). They allege that Capital Plus began withholding 10 percent of their payments on about June 18, 2021. Giga, they say, wrote on February 8, 2022 that Capital Plus was holding the money until "any issues that may come about as loans go through the forgiveness and repayment process" were resolved, which "could take up to 5 years," and by August 31, 2022 she calculated the sum at $4,935,371.04. They claim Capital Plus owes "at least $5 million and likely more than $25 million." They also allege that while it held the money Capital Plus "'loaned' $335 million to its parent company Crossroads," which paid bonuses and dividends (complaint, paras. 1–2, 27–37, 47).

Crossroads' consolidating balance sheet for July 31, 2022 shows Capital Plus owed $335,296,776 by Crossroads and its special-purpose subsidiaries, labeled an intercompany receivable. That it was a loan, or a transfer made to defraud creditors, is the plaintiffs' allegation, and no court decided whether it was true. The court denied Capital Plus's partial motion to dismiss on September 17, 2024 (Doc. 18); the free docket does not show the order's reasons. In an earlier borrowers' case against Capital Plus and Crossroads, Greathouse, the same judge had held on September 6, 2023, at the pleading stage, that allegations that Crossroads "upstreamed" PPP fees and advances were enough to plead actual fraud; that case settled and was dismissed with prejudice on May 22, 2024 (Greathouse v. Capital Plus Financial, N.D. Tex. No. 4:22-cv-00686-P, opinion, Doc. 82; stipulation, Doc. 125). Capital Plus filed a counterclaim and third-party complaint on January 8, 2025 (Doc. 41), and the case closed on February 7, 2025. The docket entries available do not say how it ended.

Womply v. Capital Plus, BA Fin Orion and Calhoun

Womply (Oto Analytics) sued Capital Plus Financial, LLC, its parent Crossroads Systems, Inc., Donnelly, BA Fin Orion, LLC and Calhoun in Dallas County in 2021; Capital Plus and its co-defendants removed the case to federal court on October 25, 2021 (N.D. Tex. No. 3:21-cv-2636-B). Womply's amended complaint of December 23, 2021 alleges that Womply "referred 86,521 PPP loans to Capital Plus through Blueacorn," that it contracted with BA Fin Orion alone after assurances that it could see a joint Blueacorn and Capital Plus fee account at Evolve Bank & Trust, and that Capital Plus received $186,882,948 in SBA fees on those loans. It claimed $76,714,482.67 and brought fraud, negligent misrepresentation and civil conspiracy claims against BA Fin Orion and Calhoun and a breach-of-contract claim against BA Fin Orion (First Amended Complaint). Womply's claim is 41 percent of the fees Womply says Capital Plus collected on those loans. At the 52.8 percent implied by Blueacorn's letter, Blueacorn's share of $186,882,948 would have been about $98.7 million, leaving Blueacorn about $22.0 million after Womply's claim (computed from the parties' figures).

As the court summarized it, "Blueacorn continues to insist that Capital Plus has not paid it and thus, payment to Womply is not yet due." Blueacorn told the Subcommittee that under the agreement Womply was to be paid "upon Blueacorn's receipt of payment from Blueacorn's lending partner," and that "Womply does not owe Blueacorn any payment." Its letters described Womply's loans two ways. On January 12, 2022 they "were reviewed and underwritten by Womply without any involvement from Blueacorn." On March 25, 2022, "Upon receipt of the Womply-referred applications, Blueacorn performed additional review," comparing incomes with Bureau of Labor Statistics data and checking for duplicate emails, phone numbers and tax IDs.

On April 11, 2022 the court dismissed the claims against BA Fin Orion and Calhoun without prejudice for lack of personal jurisdiction, because "Womply's causes of action do not arise from the Blueacorn Defendants' connections to Texas" (order). On July 20, 2022 it let Womply file a second amended complaint with "nearly three pages of allegations detailing Blueacorn's 'substantial connections to Texas'" (memorandum opinion and order). On November 14, 2022 the court recorded that "the parties have settled this case" and closed it administratively; on January 5, 2023 it dismissed "the claims and causes of action asserted by the parties herein" with prejudice, each side bearing its own costs (Docs. 152, 156). The terms are not public. The dismissal order records no finding against any party, and a settlement is not an admission by either side.

Womply's own table of fees "collected from Lenders and Platforms to date," filed with the Subcommittee on April 14, 2022, shows no referral or technology fees from BA Fin Orion; the table "does not reflect amounts owed but not yet paid" (Womply's response to the Subcommittee, p. 3). What Womply received after that date is not in the record. Womply's side of the program is in How Much Did Womply Make From Pandemic Relief? and on its network page.

The trademark case

On June 10, 2021 Beringer Commerce, Inc., doing business as Blue Acorn iCi, sued Fin Cap, Blue Acorn PPP, Blue Oak Forest, Cota, Flores, Hockridge and Reis in federal court in North Carolina. It claimed trademark infringement, copyright infringement, cybersquatting and unfair competition. It alleged that the defendants used an "identical copy of Plaintiff's acorn logo" and in March 2021 "flooded the market" with the mark. It said it had been "inundated with calls, complaints, emails, messages, and investigative inquiries relating to Defendants' business," including complaints "such as fraud and misdirection of loan funds." It had registered BLUE ACORN ICI as a trademark on February 16, 2021 (verified complaint; docket). The parties filed a stipulation dismissing all claims and counterclaims on April 11, 2022. No court ruled on the merits.

Other cases

• Marshall v. Prestamos CDFI (E.D. Pa. No. 5:21-cv-4337): borrowers alleged that Prestamos reported their loans as funded, collected the fees and never sent them the money. The court summarized Prestamos's answer: it had Blueacorn review loans that borrowers' banks returned with fraud codes, and "kept the loan processing fees because the government said that it could." Class certification was denied on April 29, 2025, and the case was dismissed on September 9, 2025 after the parties reported a settlement (memorandum opinion; order). Blueacorn was not a party.
• Spencer v. Business Warrior (Maricopa County Superior Court No. CV2024-001136): Blueacorn's two review vendors sued each other in 2024, Adam Spencer and Elev8 against Business Warrior and its officers. The register of actions showed the case active in mid-2026; we do not have the complaint.
• Maloney v. Fin Cap (Maricopa County Superior Court No. CV2021-009613): Sean Maloney sued Fin Cap on June 14, 2021. Fin Cap served an offer of judgment in April 2022, and the case was dismissed with prejudice on the parties' stipulation on July 11, 2023 (register of actions). The register does not show the claim.
• Peek v. Blueacorn PPP (No. CV2021-010032): Keith Peek, representing himself, sued Blueacorn PPP in June 2021. In August he asked for sanctions, a freeze of the company's assets and an order to start a qui tam case, then dismissed the case without prejudice (register of actions).
• Fin Cap v. JPMorgan Chase Bank (No. CV2021-054011): Fin Cap sued JPMorgan Chase Bank, N.A. on November 10, 2021 and filed a notice of voluntary dismissal on December 21, 2021 (register of actions). The register does not show the claim.

The Blueacorn lawsuits on one timeline: Blueacorn in court, 2021–2026.

---

Congress and the SBA

On November 22, 2021 Chairman James Clyburn of the House Select Subcommittee on the Coronavirus Crisis wrote to Calhoun asking about Blueacorn's PPP processing (letter). Blueacorn answered through Sidley Austin in letters from December 2021 to March 2022, asking that information it called "business-sensitive" not be made public. The Subcommittee's staff report was released on December 1, 2022. Its findings carry no penalty.

On December 8, 2022 the SBA said it had "immediately suspended non-lenders Blueacorn and Womply, companies that worked with PPP lenders, from working with the SBA in any capacity," and had opened investigations of eight lenders, Capital Plus and Prestamos among them (SBA statement). We found no published suspension notice, exclusion record or later lifting of the suspension.

The Crossroads group's audited statements say that Capital Plus signed a voluntary agreement with the SBA on January 6, 2023 and that the SBA paused its guaranty purchases. They say the SBA told Capital Plus on August 28, 2023 that it had "concluded its investigation and review of Capital Plus with no material adverse findings" (Crossroads FY2023 audited financial statements, note 19). We found no SBA record of this, and no outcome for Prestamos.

---

After PPP

Blueacorn's lender work ended with the program. The companies remained litigants: Blueacorn PPP and Fin Cap in Delaware against Paynerd, Fin Cap against Capital Plus until May 2025, and BA PPP Fin against Prestamos until February 2026.

The House report noted in 2022 that, "according to public records, Mr. Reis relocated to San Juan, Puerto Rico, which has no capital gains tax, following his work at Blueacorn and has registered another company, Lender Service Consultants LLC" (p. 27). The same page describes an October 8, 2021 video, geolocated by Subcommittee staff to San Juan, in which Hockridge recorded Reis on the balcony of a luxury beachfront apartment. Four days earlier, on October 4, 2021, Puerto Rico's Department of Economic Development and Commerce had approved an individual-investor decree for "Stephanie M Hockridge," according to its published list of decree beneficiaries (DDEC decree beneficiaries list). In 2025 his judgment ordered the sale of two Puerto Rico condominiums, and both defendants later asked to have the garnishment heard in Puerto Rico, saying they lived there (Doc. 429).

We found no criminal charge against Noah Spirakus, Barry Calhoun, Matt Yahes, Matt Mandell, Taylor Hendricksen or the Spencers. Spirakus, Reis and Calhoun remained defendants on Paynerd's fraudulent-inducement counterclaims in Delaware as of the last ruling found, in 2023. The House report recommended that the SBA's Inspector General investigate the loans "applied for and awarded to Ms. Hockridge, Mr. Reis, the Spencers, and family members of the Spencers and refer them to law enforcement if appropriate" (pp. 83–84).

---

Current posture (records through August 25, 2026)

• Company. Suspended by the SBA, the agency said on December 8, 2022; no lifting found. No criminal charge against any Blueacorn company found.
• Reis. Serving 120 months (ABC15). Appeal No. 25-11394 pending; the government's motion for default and order of sale and his cross-motion undecided as of June 24, 2026.
• Hockridge. Appeal No. 25-11332 pending, argument tentatively set for November 2026 (ABC15); surrender date December 1, 2026 (Doc. 466).
• Trusts. Final order of garnishment (Doc. 456), entered with the nominee ruling of April 29, 2026, stayed pending appeals Nos. 26-10440 and 26-10441 and the trustee's appeal (Doc. 472, June 8, 2026), except as that stipulation provides; the exceptions are not public. No recovery shown.
• Flores. Sentenced to 41 months in September 2025. Cota and Arriaga on probation.
• Karnezis brothers. Pleaded guilty in March 2025; sentences not found.
• Paynerd. Delaware claims and counterclaims: no ruling, judgment or settlement found after the 2023 and 2024 rulings. Blueacorn told the Arizona court in April 2025 that the Delaware case was pending. By Blueacorn's account, the arbitrator made a $19,796,022.81 reserve at Capital Plus payable to Paynerd absent Paynerd's agreement or a final ruling for Blueacorn in a proceeding that includes Paynerd (application, paras. 11–13).
• Capital Plus. Final Award of April 29, 2024 confirmed by the federal court in Arizona, with judgment entered for Blueacorn on May 21, 2025 (order; amended judgment); the award is under seal, and Blueacorn says a portion of the funds has been paid.
• Prestamos. Judgment filed February 2, 2026 and marked final on BA PPP Fin's application to confirm an arbitration award (Maricopa County No. CV2026-001079); the register shows no amount (register of actions).
• Womply. Settled; dismissed with prejudice January 5, 2023; terms not public.

---

Timeline

---

Related profiles

• Nathan Reis, Stephanie Hockridge, Noah Spirakus, James Flores, Michael Cota, Vivian Arriaga
• Barry Calhoun, Matt Yahes
• Paynerd, Matt Mandell, Taylor Hendricksen
• Capital Plus Financial and Crossroads, Eric Donnelly
• Prestamos CDFI and Chicanos Por La Causa
• Business Warrior
• Womply: How Much Did Womply Make From Pandemic Relief?; Womply network
• Fee collectors: How Much Did Blueacorn Make From Pandemic Relief?; How Much Did Capital Plus Financial Make From Pandemic Relief?
• Networks: Blueacorn, Prestamos CDFI, Capital Plus Financial
• David Adame — President and CEO of Chicanos Por La Causa (2015–October 2023), parent of Prestamos CDFI, Blueacorn's original PPP lender.
• Elizabeth Carr — DOJ trial attorney on the prosecution of Blueacorn's co-founders Nathan Reis and Stephanie Hockridge.
• Glenn Leon — chief of DOJ's Fraud Section, whose trial attorneys prosecuted Blueacorn's founders.
• Husayn Kassai — co-founder and former CEO of Onfido, which Blueacorn made its primary PPP identity check in April 2021, per the House report.
• Jeffrey Ryan McLaren — DOJ trial attorney on the prosecution of Blueacorn's co-founders Nathan Reis and Stephanie Hockridge.
• John Dancu — longtime CEO of IDology, whose knowledge-based authentication Blueacorn used until April 2021, per the House report.
• Jose Martinez — President of Prestamos CDFI, the lender of record on Blueacorn's larger channel.
• Kevin Chambers — listed as defense counsel for Nathan Reis at his December 18, 2025 sentencing.
• Leigha Simonton — U.S. Attorney for the Northern District of Texas during the prosecution of Blueacorn's founders.
• Matthew Weybrecht — Assistant U.S. Attorney for the Northern District of Texas on the prosecution of Blueacorn's founders.
• Melissa Townsley-Solis — co-founder and CEO of GIACT Systems, whose account checks Blueacorn used in its PPP process, per the House report.
• Nicole Argentieri — headed DOJ's Criminal Division when Blueacorn's founders were indicted in November 2024.
• Philip Trout — DOJ Fraud Section supervisor on the prosecution of Blueacorn's founders.
• Rhett Doolittle — chairman and CEO of Business Warrior, which provided supplemental PPP application review for Blueacorn, per the House report.
• Richard Finneran — counsel for Stephanie Hockridge in the prosecution of Blueacorn's founders.
• Thiruvendran "Thiru" Vignarajah — chief executive of Capital Plus Financial, which originated loans for Blueacorn in 2021, from August 2021 through the end of 2023.

---

Sources

Congress and the SBA

• House Select Subcommittee on the Coronavirus Crisis, "We Are Not the Fraud Police": How Fintechs Facilitated Fraud in the Paycheck Protection Program (Dec. 1, 2022) The House report is a partisan staff document released by the Democratic majority's staff in the final weeks of the 117th Congress, with no public hearing and no sworn testimony; an arbitrator refused it as "rank hearsay" that relied on companies then in arbitration with Womply, and a federal judge declined to take judicial notice of its findings (about the report).
• Select Subcommittee, Blueacorn documents: Sidley Austin letters for Blueacorn of Dec. 23, 2021, Jan. 12, Feb. 4 and Mar. 25, 2022; Capital Plus response of July 22, 2022; Prestamos CDFI letter of Aug. 18, 2022; public version of the Delaware complaint against PayNerd
• Chairman Clyburn to Barry Calhoun, Blue Acorn PPP, LLC (Nov. 22, 2021)
• Oto Analytics, Inc. d/b/a Womply, response to the Select Subcommittee (Apr. 14, 2022), in the Subcommittee's Womply documents
• SBA statement on the Select Subcommittee report (Dec. 8, 2022)
• SBA interim final rule, 85 FR 20811 (Apr. 15, 2020)
• SBA interim final rule, 86 FR 3692 (Jan. 14, 2021)
• Puerto Rico Department of Economic Development and Commerce (DDEC), "Beneficiarios de Decretos" decree beneficiaries list (rev. Nov. 25, 2025): Puerto Rico DDEC, decree beneficiaries list ("Beneficiarios de Decretos", rev. Nov. 25, 2025) (original: docs.pr.gov)

Blueacorn's own pages

• Blueacorn homepage (May 6, 2020)
• Blueacorn, About Us: "Meet Our Volunteers" (February 2021)
• Blueacorn, "Blueacorn helps process over $14 billion in loans throughout the Paycheck Protection Program"
• Capital Plus Financial, partnership announcement with Blueacorn (Jan. 11, 2021)

United States v. Reis and Hockridge, N.D. Tex. No. 4:24-cr-287-O

• Case filings
• Indictment (Nov. 14, 2024)
• Superseding indictment (May 8, 2025)
• Reis factual resume, Doc. 272 (Aug. 6, 2025)
• Judgment, Stephanie Hockridge, Doc. 362 (Nov. 25, 2025)
• Judgment, Nathan Reis, Doc. 390 (Dec. 18, 2025)
• Reis plea agreement, Doc. 273 (Aug. 6, 2025)
• Hockridge memorandum in support of motion for judgment of acquittal, Doc. 216 (June 19, 2025)
• Memorandum opinion and order denying new trial on Brady grounds, Doc. 354 (Nov. 20, 2025)
• Order on Reis's objections to the presentence report, Doc. 385 (Dec. 16, 2025)
• Memorandum opinion and order denying transfer to the District of Puerto Rico, Doc. 429 (Feb. 10, 2026)
• Opinion and order on the writs of garnishment, Doc. 455 (Apr. 29, 2026)
• Docket entries 223, 224, 276, 310, 348, 368, 376, 395, 396, 456, 458–466, 470–472, 476
• DOJ, Hockridge conviction (June 2025)
• DOJ, Hockridge sentencing (Nov. 21, 2025)
• DOJ, Reis sentencing (Dec. 18, 2025)
• DOJ, "Nevada Trusts Ordered to Return Approximately $30 Million Transferred by Convicted Fraudsters" (May 19, 2026)
• ABC15, "Hockridge prison sentence delayed again until December"
• ABC15, "Judges will hear oral arguments in Hockridge's appeal of Blueacorn PPP fraud case"

Related criminal cases

• United States v. Flores, N.D. Tex. No. 4:24-cr-306-Y: information, factual resume, judgment, amended judgment
• United States v. Cota, N.D. Tex. No. 4:24-cr-5-Y: judgment
• United States v. Arriaga, N.D. Tex. No. 4:24-cr-6-Y: judgment
• DOJ, "Arizona Brothers Plead Guilty for Roles in Conspiracies to Fraudulently Obtain Nearly $109 Million in Covid-Relief Funds" (Mar. 21, 2025)
• United States v. Karnezis, D. Or. No. 3:23-cr-67-IM: Fredrico Williams's motion to compel Brady and Giglio material, Doc. 152 (Mar. 16, 2026); order on the motion, Doc. 192 (July 31, 2026; not on the free docket)
• United States v. Eley, E.D. La. No. 2:23-cr-85, bill of information
• United States v. Campbell, S.D. Ala. No. 1:21-cr-161, indictment (Sept. 29, 2021)
• United States v. Holmes, M.D. Ga. No. 5:25-cr-54, indictment (Nov. 18, 2025)
• United States v. Kavroulakis, N.D. Ill. No. 1:25-cr-382, indictment
• United States v. Roberson, E.D. La. No. 2:25-cr-210, Doc. 61, order on business records (Aug. 12, 2026)
• DOJ, indictment of Latrina Dorsey and Dushawn Nelson (Aug. 21, 2026)

Civil cases

• Fin Cap Inc. v. PayNerd LLC, Del. Super. No. N21C-12-118 MMJ CCLD, opinion (Aug. 16, 2023)
• Blueacorn PPP, LLC v. Pay Nerd LLC, Del. Ch. No. 2023-0414-MMJ, opinion (Jan. 29, 2024)
• Oto Analytics v. Capital Plus Financial, N.D. Tex. No. 3:21-cv-2636-B: First Amended Complaint, Blueacorn defendants' motion to dismiss, order of Apr. 11, 2022, memorandum opinion and order of July 20, 2022; docket entries 152 and 156
• Beringer Commerce, Inc. v. Fin Cap, Inc., E.D.N.C. No. 5:21-cv-251: verified complaint (June 10, 2021); docket
• YXS Investments, Inc. v. Capital Plus Financial, LLC, N.D. Tex. No. 4:24-cv-664, Doc. 1, complaint (July 17, 2024)
• Fin Cap Incorporated v. Capital Plus Financial LLC, D. Ariz. No. 2:25-cv-1122: application to confirm the award, Doc. 1; order confirming the Final Award, Doc. 16; clerk's judgment, Doc. 17; amended clerk's judgment, Doc. 18; docket
• Marshall v. Prestamos CDFI, E.D. Pa. No. 5:21-cv-4337: memorandum opinion (Apr. 29, 2025), order of dismissal (Sept. 9, 2025)

Company filings

• Crossroads Impact Corp, audited consolidated financial statements, fiscal 2023
• Crossroads Impact Corp, quarterly financial statements for the periods ended Apr. 30 and July 31, 2024